Gold Futures Decline as Commodities Drop on Budget Talks Impasse

By Debarati Roy -
Dec 24, 2012

Gold futures declined as a stalemate
in U.S. budget talks drove commodities down. Silver and platinum
also retreated.

The Standard & Poor’s GSCI Spot index of 24 commodities
slipped as much as 0.4 percent. Time is running out for U.S.
lawmakers and President Barack Obama to agree on a budget deal
by year-end to avoid triggering more than $600 billion in tax
increases and spending cuts, Senator Joseph Lieberman said.

“There is very little time left to avert the situation,”
Frank McGhee, the head dealer at Integrated Brokerage Services
LLC in Chicago, said in a telephone interview. “People are
getting increasingly worried that we may slip into recession.”

Gold futures for February delivery declined 60 cents to
settle at $1,659.50 an ounce at 12:37 p.m. on the Comex in New
York. Prices slumped 2.2 percent last week, the biggest weekly
loss since November.

Holdings in gold-backed exchange-traded products fell 1.6
metric tons from a record to 2,630.9 tons on Dec. 21, data
compiled by Bloomberg show. Gold prices are set for a 12th
consecutive annual gain as central banks from the U.S. to China
pledge more steps to spur economic growth.

Silver futures for March delivery lost 1 percent to $29.897
an ounce on the Comex.

On the New York Mercantile Exchange, platinum for April
delivery slid 0.1 percent to $1,538.90 an ounce. Palladium for
March delivery rose 0.3 percent to $684.55 an ounce.